Tronox Holdings Plc · NYSE:TROX
Tronox — Credit Suisse Chemical Conference 2007
24 slides from Tronox's conference presentation, Oct 2, 2007
Slide 1: Credit Suisse Chemical Conference September 27, 2007
Credit Suisse Chemical Conference September 27, 2007
Slide 2: Forward-Looking Statement
Forward-Looking Statement Tronox makes certain forward-looking statements in this presentation that are subject to risks and uncertainties. These statements are based on the beliefs and assumptions of our management and on information currently available to our management at the time of such stateme
Slide 3: Tronox Incorporated Snapshot
Tronox Incorporated Snapshot NYSE Listed: TRX, TRX.B 40 Years Operating Experience Market Capitalization: ~$450MM Debt as of Aug. 31, 2007: $535MM 2006 Sales Revenue: $1.4B Primary Product: Titanium Dioxide (TiO2) Third-largest global producer Electrolytic Chemicals: Manganese dioxide Sodium chlorat
Slide 4: TiO2 Pigment
TiO2 Pigment Quality-of-Life Product, No Effective Substitutes Unsurpassed Opacifying & Whitening Properties Paints & coatings, plastics, paper, consumer products and specialties Semi-specialty, differentiated and frequently customized 2006 TiO2 Demand By End-Use Market Coatings Plastics Paper & Spe
Slide 5: Global Producer / Strong Leadership Position
DuPont Millennium Tronox Huntsman Kronos Others East 0.2 0.15 0.12 0.1 0.1 0.33 Global Producer / Strong Leadership Position Highly Concentrated Industry - Top 5 Producers Account for ~67% of Global Production Third-largest global producer Leading Supplier to Global Customers in Multiple Regions of
Slide 6: TiO2 Inputs
Source: Census Bureau PPI Industrial Chemicals (1982 = 100) TiO2 Inputs
Slide 7: Strategic Focus
Strategic Focus Baseline Improvements Project Cornerstone Additional savings Selling Stranded Assets Progress being made Environmental and Legal Mitigate liability Balance Sheet Flexibility
Slide 8: Cornerstone Execution (as of June 30, 2007)
Cornerstone Execution (as of June 30, 2007) Cash Cost Reductions Land Sales & Capital Program * Does not include 2,200-acre LandWell sales Status Summary Teams on track or ahead of schedule Remain committed to target attainment Beginning to realize benefits in the bottom line $MM $MM (Cumulative) (C
Slide 9: Project Cornerstone Cash Cost Reductions
Project Cornerstone Cash Cost Reductions Additional Savings $18MM in Op Cost $ 7MM in SG&A $25MM Additional Savings $MM (Cumulative) Project Cornerstone $50MM Op Cost Savings $10MM SG&A Savings $60MM Targeted Savings $ 3 $ 8 $ 3 $28 $ 7 $10 $10 $50 $ 7 $10 $18 $50 Additional Savings Additional Savin
Slide 10: Project Cornerstone Additions
Project Cornerstone Additions Work Force Reductions ~7% or 100 Positions Excludes Uerdingen, Germany One-time costs of $9MM to $11MM Reductions in Retiree Medical and Life Insurance Effective April 1, 2009 Reduction in amount paid for retiree medical from 66% to 25% Change in retiree life insurance
Slide 11: Land Sales & Capital Program
Land Sales & Capital Program Land Sales & Capital Program Status Summary Land 53-acre Henderson tract - Q4, 2007 Closed sale of 5 gas station properties = $600,000 in proceeds Q3 Henderson light industrial market remains strong Capital Disciplined approach to managing capital $75MM to $80MM projecte
Slide 12: Land Sales Highlights
Land Sales Highlights Tronox 100% Henderson, Nevada ~150 acres total Signed contract on 53-acre tract Additional sales of smaller tracts expected in 2007 Closing subject to receipt of NFA LandWell Company Participation 2,200-acre development progressing Planning Commission approved development plan
Slide 13: Working Capital & Cash Flow - Ahead of Schedule
Working Capital & Cash Flow - Ahead of Schedule Cash to Cash 127 138 Cash Flows $29 ($1) Reduced Term Loan by $12MM, June 30, 2007 (In Days) March 31, 2006 From Operating Activities ($MM) Q2, 07 Q2, 06 Cornerstone YTD 2007
Slide 14: Global TiO2 Manufacturing Operations
Location M Tonnes Hamilton 225 Savannah 110 Western Australia 110 Botlek 90 Uerdingen (Sulfate) 107 Global Capacity 642 Global TiO2 Manufacturing Operations Nameplate Capacity (1) (1) Reflects 100% of the production capacity of the Kwinana pigment plant, which is 50% owned by Tronox and 50% by the j
Slide 15: Uerdingen, Germany
Uerdingen, Germany Decision to Retain Facility World-Class Sulfate Process New High Ilmenite Feed Process Annual Capacity = 107,000 MT Strategic Focus: Maintain core plastics & coatings business Increase specialty sales Continue to ramp up HIF process Aggressively pursue Cornerstone cost reductions
Slide 16: Asia-Pacific Growth: Kwinana Pigment Plant Expansion
Asia-Pacific Growth Kwinana Pigment Plant Expansion 40,000 to 50,000 tonne expansion From 110,000 to 150,000 - 160,000 tonnes New Volume to Serve Asian Growth Excellent Cost Position Fully Integrated Production Facility Cooljarloo mine Chandala synthetic rutile facility
Slide 17: TiO2 Consumption
TiO2 Consumption Source: Company Estimates and U.S. Government Population Statistics
Slide 18: Titanium Tetrachloride
Titanium Tetrachloride Leverage Technology Advantage High Growth Titanium Metals Market Multiple Tronox Plant Locations with High-Quality TiCl4 Titanium Metals Manufacturing
Slide 19: Debt Pay Down
Debt Pay Down $12.0MM Reduction, YTD 2007 Total Outstanding Debt as of Aug. 31, 2007: $535MM 2006 2007 East 190 178 ($MM) Term Loan $190.0 $178.0 2006 2007 Dec. 31 Aug. 31
Slide 20: Financial Items
Financial Items Financial Items ($MM) Six Months ended June 30, 2007 2007 Outlook SG&A $65 $125 to $130 Interest Expense $24.7 $48 to $52 Capital Expenditures $33.8 $75 to $80 Depreciation and Amortization $55.8 $106 to $110 Effective Tax Rate -33%
Slide 21: Environmental Reserves
Environmental Reserves = $214MM Receivables 2007 Net Cash Spend Projected = $35MM to $40MM Mitigating items Government reimbursements (DOE, DOD) Insurance policies Kerr-McGee 7-year remediation cost reimbursement program Reimburses Tronox for 50% of remediation cost in excess of reserves at IPO up t
Slide 22: Outlook
Outlook World 2.1% 2.7% 10.5% 3.4% 2007 GDP Forecast Regional Health Gauge (major country proxy) Germany China United States Continued High Input Prices Weak U.S. Housing Strong Demand Asia-Pacific and Europe Additional Project Cornerstone Cost Reduction Initiatives Source: Consensus Economics Inc.
Slide 23: Q&A
Q&A www.tronox.com
Slide 24: Credit Suisse Chemical Conference September 27, 2007
Credit Suisse Chemical Conference September 27, 2007